Australian unemployment drops to 9.5% in August – as lockdowns force contractions in key workforce estimates

“Although the latest Roy Morgan employment estimates for August show unemployment falling 0.2% points to 9.5%, the broader picture shows this is not due to increasing jobs but rather the impact of lockdowns directly impacting over half of the Australian population.

“In August all the key employment estimates were down on July with the workforce down for a second straight month and down by 365,000 since June when the long Sydney lockdown began. Australian employment also dropped in August, by 157,000, while unemployment was down by 60,000 as rather than getting new jobs people looking for work stopped looking and were forced to stay at home.

“Unfortunately, the lockdown of over 15 million Australians in NSW, Victoria and the ACT during August is set to continue throughout the current month of September. However, the ‘relatively’ positive news is that the vaccination program has significantly accelerated in recent weeks as locked down people in NSW and Victoria rush out to get vaccinated and the full vaccination targets of 70% and 80% of the population are set to be reached earlier than initially forecast.

“Already over 70% of people in NSW have had their first vaccine dose and over 40% are now fully vaccinated. Victoria is a bit behind but has seen an accelerating uptake in recent weeks as the state endures its sixth lockdown. At current rates of vaccination some restrictions are set to be eased later in September and there is the prospect that the lockdowns in both States could be lifted entirely by late October or perhaps early November.

“Given the unprecedented forces being exerted on the labour market the declines in key employment estimates in August provide a superficially positive comparison to the results from prior months. However, it is worth noting that overall unemployment and under-employment of 2.54 million (17.7% of the workforce) is the lowest monthly figure since February 2020 (2.44 million) prior to the pandemic.

“Despite the positive trends on vaccination the next two months are still set to be very hard for the retail, hospitality, recreational and personal businesses that rely on close personal contact. During this period it remains absolutely imperative that both Federal & State Governments offer businesses negatively impacted by the lockdowns a sufficient level of support to ensure business closures over this period are kept to a minimum.

“Although for many Australians currently stuck in lockdown the lifting of restrictions appears far away in reality we should finally emerge into a new ‘COVID-Normal’ in around two months’ time. The vision of people going about their daily lives from the highly vaccinated countries of the UK, USA and in Europe shows that there is an end in sight that we are approaching.”